Better safe

What is it about?

Lending officers in banks assess loan applications defensively in times of financial crisis. This paper concludes that such defensiveness is related to the Basel-regulations, the corporate strategy of the bank and to individual-level factors. Defensiveness may result in fewer credit losses but also in missing out on profitabile business opportunities.

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Why is it important?

Provides insights on bank lending to SMEs during financial crisis to the benefit of SME owner/managers. Provides guidance concerning lending defensiveness and its triggers to the benefit of financial executives including bank managers